Chinese Ministry of Finance Emphasizes Utilizing an Aggressive Fiscal Policy
Table of Contents
You might want to know
- How does the Chinese fiscal policy plan to enhance consumer spending?
- What measures are being taken to stabilize employment and foreign trade?
Main Topic
On November 7, the Ministry of Finance of China issued the '2025 First Half Fiscal Policy Implementation Report' (hereinafter referred to as the 'Report'). This document reviews the fiscal activities for the first half of the year and outlines the future direction of fiscal policy. The Report emphasizes six primary areas, one of which is the strategic application of an increasingly aggressive fiscal policy. It also focuses on boosting consumer activities, promoting stable employment and foreign trade, and amplifying employment-supporting policies.
The Report states that since 2025, the fiscal policy has become more aggressive and sustained in its impact, with a particular focus on stabilizing employment, enterprises, markets, and expectations. Maintaining positive synergy with other policies is driving sustained economic recovery. During the first half of the year, China's fiscal performance remained stable, with sound budget execution aligning with expectations.
There was a concerted effort by fiscal policy to promote consumption and expand investments, invigorating the domestic market. In juggling the stability of foreign trade and investment, the Ministry effectively harnessed tariff regulation tools. The government responded proactively to external shocks, notably counteracting the tariffs imposed by the United States with equivalent measures. Participation in China-US trade talks aimed to significantly reduce tariffs and extend tariff suspension arrangements, thereby boosting market confidence both locally and globally.
In terms of fiscal scientific management, starting from 2025, the Ministry of Finance initiated a program in 12 pilot provinces to conduct local fiscal scientific management. This involves 11 tasks, such as optimizing fiscal resource and budget consolidation and deepening zero-based budgeting reforms. The goal is to achieve new advancements and breakthroughs in key fiscal management areas within two years. As disclosed in the Report, all pilot regions have distributed implementation plans for fiscal scientific management, and the pilot tasks are moving forward stably and orderly.
For the management of state-owned assets, the Ministry established a national platform for the adjustment and sharing of assets across administrative and public sectors. During the first half of the year, the platform facilitated over 20,000 asset adjustment and sharing entries, completing upward of 200 asset adjustments and conserving over 40 million yuan in budget funds.
Looking ahead, the Report highlights six focal points, such as harnessing an active fiscal policy, fully supporting stable employment and foreign trade, nurturing new growth drivers, ensuring improved livelihoods, continuously mitigating key area risks, and enhancing fiscal governance.
Specifically, on policy action, the Report suggests continuing the action plan to stimulate consumption by granting fiscal interest rate subsidies on personal consumption loans in key areas and loans to businesses in related industries. It seeks to inspire consumption potential in services like elderly care and childcare. The role of local government special bonds and ultra-long-term special sovereign bonds is emphasized, as is enhancing the synergy between fiscal and financial strategies to include more public services within the investment support framework and actively encourage private investment development.
Moreover, the Report stresses enhancing employment-supporting policies, advancing public employment services, vocational skills training, and job stabilization and expansion efforts, with every possible measure taken to stabilize employment posts. Strengthening 'one old and one young' services includes offering elderly service consumption subsidies to moderately disabled older adults, gradually implementing free preschool education, and efficiently managing childcare subsidy policies. It further continues improving education, healthcare, and other essential livelihood support policies. Additionally, ongoing implementation of a comprehensive debt management policy is crucial, diligently replacing implicit debt while swiftly addressing new instances of implicit debt with accountability measures.
Key Insights Table
| Aspect | Description |
|---|---|
| Aggressive Fiscal Policy | Focused on boosting consumer activities and stabilizing employment and foreign trade. |
| Fiscal Scientific Management | Involves zero-based budgeting reforms and optimizing fiscal resource allocation. |
| State-Owned Assets Management | Platform enabled asset sharing and adjustments, saving significant budget funds. |
Afterwards...
As China's fiscal policy embraces a more aggressive stance, the focus remains on refining the synergy between fiscal and financial strategies. The goal is to foster sustainable growth through nurturing **new economic drivers** and champion expedited service expansions, such as enhanced public services. As the world grapples with evolving financial landscapes, the collaboration between fiscal initiatives and technological advancements shall remain pivotal. Stakeholders globally should keenly observe the lessons from China's approaches to policy orchestration and fiscal innovation, providing a blueprint for emerging economies to emulate.